I was reading your first post in this thread and something struck me as really "out of ordinary." You have only traded for 5 months, and you already were throwing those trading terms around like a 10-year veteran!, like "retracement," "rally," "stop," "pullback," and so on. Then you were shorting like a 10-year veteran, again and again on the same day. To tell the truth, my first short trade occurred two years after I started to trade. yes, it took me two years to muster up enough courage to short a stock! I cannot help thinking: Your progress is really "super-fast." Any reason for your "super-fast" progress? I know it's not bighog, because he showed up much later.
NOD - Good trading today Ma'am Two more days of business before we can enjoy a 3 day weekend Now clear your mind and prepare for tomorrow â the market does not remember what we did today, neither should we â good or bad RN
I started out in Feb 2008 knowing nothing whatsoever, had a string of beginner's luck, then gave back a lot of it as a result of trading large size, using no stops, and having no clue about anything. I immediately immersed myself in anything I could related to trading. I watched every educational webinar Etrade offered, studied Japanese candlesticks, participated in some Velez webinars, read a few basic books, then checked out Alan Farley's "The Master Swing Trader" from the library and lay in bed at night reading each paragraph about 5 times, studying the chart, reading it again, studying the chart (I really had no IDEA what he was talking about, but I have a nearly photographic memory for numbers and patterns, so I think it all stuck in my brain somewhere). By mid-May I realized that I was now hesitant to swing trade and wanted to start day trading. I paper traded intraday for weeks and one week I tried a few live day trades, enough that when I logged in mid-week I was informed I was a pattern day trader and suddenly my margin had doubled. At this point I had never yet shorted a stock. I'd discovered ET in May and had been following the conversations in ET's old chat room (you could read the entire convos for any date). I was especially impressed by this very profitable trader named 1Reason. He called all his trades, seemed to really know what he was doing and he was making nice profits all the time. I returned from a vacation in early July and started day trading live using much of what I'd learned in various webinars. I was quite successful at it, but I'd still never shorted anything. I finally got the nerve to log into the chat room one day, called my trades like 1R always did and struck up some conversations with him. He was shorting stocks exclusively. He'd call a setup and what he was offering. He picked tops like a psychic. I think I mirrored one or two of his trades to the short side and realized that shorting a stock didn't cause me to have a seizure or my computer to go up in flames. It was the exact same process as going long, only backwards. Because I tend to go "all in" when I find a passion, and because I was able to dedicate myself to trading full-time from the start, I very likely crammed a couple years of experience into that first 5 months.
Thanks RN. Thanks especially for opening my eyes to a different way of seeing the trading environment.
This thread has become quite the body of knowledge and observation. A great resource. Nice work ND keep it up and thanks to those who have offered their knowledge. I have a couple comments to make about what it takes to learn trading. Just my own opinion but it's based on a fair amount. My observations are few teach themselves to be great traders just like no one teaches themselves to be great in any career. It takes of course learning (that's the easy part) about the mechanics of trading but then to actually put that knowledge to work takes mentoring and even better networking with others who are good at it. Why? It's been touched on here but it not only has to do with finding what works but it has to do with building trust in yourself, your system, trust in how you perceive the market and it's behavior day to day, and trust in the outcome. Without any of these trading will be a constant source of confusion and frustration because without that trust there is self doubt. And if there is self doubt, there is indecision, which are manifested in the things the ND talks about...hesitation, switching time frames or approaches, trying different things to find if something will work better than the last thing she was using, using different markets, using different entry signals, so on and so forth. It's all an attempt to find that comfort and sense of trust that our actions will produce the desired outcome. And nowhere else than in the markets we know that can never happen. Sometimes we get it and sometimes we don't and when we don't we ask why and that is a very elusive question to handle by yourself. So we search. For those of you that do this full time for any length of time (i.e. years) most of you probably know what I'm talking about. I'm sure there are some that will say they are the exception to the rule but to be reasonably young and good in this business you need mentoring. Quants might be the exception as markets are just numbers which makes it a different game. But that requires heavy math and most canât do that. The best thing I think someone can do is find a mentor and spend time around others who are successful at it. Those people aren't exactly everywhere in fact, they're damn hard to find. Prop shops are probably a good place to start (most the best probably being on the East Coast..sorry west coasters). A good prop shop will hopefully give you a solid education about trading and some mentoring to provide context and answer questions. If there are other good traders there you can make friends, learn from them, and mimic that. We learn best from mimicry and in most careers we get that except trading. None of this is possible from a book or video tape or anything like that. We need feedback only a mentor can provide. And really great traders seem to take it one step further. They cultivate a network of other successful traders that they keep throughout there careers. Ideas are shared, developed and implemented from these groups that help keeps everybody on the right side of things. Notice how the guys posting big numbers here seem to have this. That's the irony of it all, it's perhaps one of the most unsocial jobs there is but benefits tremendously from (and almost demands) interaction with others. The other approach? Time, tons of it, money (often tons of it) and emotional currency. I don't see any other way. Mistakes need to be made, rationalized and corrected and to do that all on your own..whew that's a lot to ask. There are other places to perhaps learn, hedge funds, banks, but those venues are off limits to most. For most people, a good prop shop and then befriending good traders will probably be THE FASTEST least expensive and most productive way to learn to trade . Starting this thread was the best thing ND could have done for herself. How far along would she be if not for the advice of people on this board? Probably not as. The internet can only go so far though. Trading like any other career is best learned watching others who are successful do it. To think that you can become a great trader by reading books and studying charts in your office without the mentoring or a network of helpful like minded people is putting already long odds even more heavily against you. This may be something for people getting into the business to consider and be of help.
Dalentar, that is a spot on post. If it wasn't for bighog, I might still have no understanding of the psychology behind a trend and behind breakouts (and how "too high" and "too low" are meaningless phrases in a trend), and the power of joining a trend or a breakout. If it wasn't for watching Greg Capra trade live via the web, I wouldn't have discovered the power of waiting patiently for a confirmed setup and then using an extremely tight stop (he was using .05.-07 cent stops when I saw that demonstration). This made me realize that I suffered my biggest losses when I jumped on a trade too early (afraid I'd miss a move), set a very wide stop because I KNEW what was going to happen next, then watch in horror as my stop was hit and then price reversed my way shortly after that. That's when I started entering trades around the price zone I would've placed a stop had I entered when I first thought I'd miss the move. This is the counter-intuitive stuff that IMHO can make or break a trader and it wasn't found in a book.
NoDoji, you are truly an extra-ordinary lady. As you can see most traders are still struggling after 5 years. You are way way above.
No one taught me anything since I started learning. For years, I was trading through Scottrade and got front-runned by its market makers almost every trade, and no one told me about it. More ridiculously, my first broker is sharebuilder.com. It had a 15-minutes delay in its charts, and I thought it was normal. I often placed a market order and got filled at a totally different price. You might ask: Why don't you use a limit order? Because nothing happened if I used a limit order (the chart had a 15-minute delay and the actual price was way different). Back to Scottrade, I used to demand that the little confirmation box must show up on my screen after an order was filled. I thought it was my lifeline, if the little confirmation box didn't show up, how the hell did I know my order was filled? I used to think that little conformation box was the single most important feature of a trading platform. If the little box didn't show up after I sent a market order, I would panic. Well, Scottrade was very "generous" and gave me plenty of chances to panic. Why? because it held my market orders from a few seconds to 10 minutes and milked me dry! Today, I would consider it outrageous if a broker holds my market order for a few minutes, but in those traumatic learning years, I didn't know they were front-running me. It only takes one experienced trader to tell me: hey, dude, they are front-running you, use a direct-access broker. But nobody told me. Damn the crooked brokers.